Dollar Surges Against Pound After Brexit Vote Postponed
December 10 2018 - 09:29AM
RTTF2
The dollar is gaining ground against all of its major rivals
Monday afternoon. The lack of U.S. economic data is keeping some
investors on the sidelines at the start of the new trading week.
However, some new Brexit developments have pushed the currency
sharply higher against the British pound.
The European Court of Justice ruled the British government could
reverse its decision to leave the bloc without the permission of
the other 27 EU members.
U.K. Prime Minister Theresa May has reportedly called off
tomorrow's Parliamentary vote on Brexit deal as her plan may face
defeat amid stiff opposition from Tory rebels. The decision came
after the PM failed to get support from enough of Tory MPs who said
they were against the deal.
The buck has broken out to nearly an 8-month high of $1.2550
against the pound sterling this afternoon, from an early low of
$1.2759.
UK economic growth slowed in the three months to October, mainly
due to a fall in car sales and stagnation in manufacturing, as the
uncertainty surrounding the country's decision to leave the
European Union, dubbed Brexit, intensified.
Gross domestic product grew 0.4 percent in the three months to
October, which was slower than the 0.6 percent expansion in the
September quarter, figures from the Office for National Statistics
showed on Monday. The latest rate of growth was in line with
economists' expectations.
Meanwhile, France's economy is set to expand at a slower rate in
the fourth quarter than estimated earlier, survey data from Bank of
France showed on Monday. The bank revised down its growth forecast
for the fourth quarter by 0.2 percentage point to 0.2 percent.
The dollar has climbed to around $1.1350 against the Euro Monday
afternoon, from an early low of $1.1442.
Eurozone's investor confidence eased sharply in December and
declined for a fourth month in a row, marking the lowest level
since the same month in 2014, survey data from Sentix showed on
Monday.
The investor confidence index dropped to -0.3 from 8.8 in
November, the behavioral research institute said. The latest
reading was the lowest since December 2014. Economists had forecast
a modest decline in the index to 8.3.
Germany's merchandise exports grew more-than-expected in October
and at the fastest pace in five months, preliminary figures from
Destatis showed on Monday.
Exports increased a calendar ad seasonally adjusted 0.7 percent
from September, when they declined 0.4 percent. Economists had
forecast a 0.4 percent gain for October.
Imports rose 1.3 percent monthly after stagnation in the
previous month. Economists were looking for a 0.5 percent gain.
The calendar and seasonally adjusted surplus was EUR 17.3
billion in October.
The trade balance was EUR 18.3 billion in October, unchanged
from September. Economists had forecast a EUR 17.1 billion
surplus.
The greenback has risen to around Y113.190 against the Japanese
Yen Monday afternoon, from an early low of Y112.241.
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